President's Letter to Shareholders
January 11, 2018
Dear Fellow Shareholders,
Serengeti achieved an important milestone late last year when we announced on November 27th that we had closed the definitive transaction with POSCO DAEWOO Corporation (“PDC”) for the Kwanika project and received PDC’s $7,000,000 cash contribution towards the advancement of a pre-feasibility study on the project. Serengeti’s interest in the Kwanika project has now been transferred into Kwanika Copper Corporation (“KCC”), a private joint venture company controlled 65% by Serengeti and 35% by PDC.
The overall objective of the pre-feasibility study is to identify the best alternatives to optimize project design and seek and test opportunities to further enhance project economics, while de-risking the project and materially advancing it towards development. Serengeti remains project operator so long as the Company maintains a greater than 50% interest and as such has received an immediate $700,000 cash payment from KCC. The pre-feasibility study will build upon our Preliminary Economic Assessment that was completed for the project earlier in the year as part of PDC’s initial earn-in expenditure.
The parties are currently developing a detailed plan for the execution of the pre-feasibility study which is expected to be completed over the next 15 to 18 months and will include a substantial drilling program targeting the Central copper-gold zone on the property. The drilling program is expected to start early in summer 2018 and will have several objectives, including resource upgrade and further testing for higher grade domains within the Central Zone, and the acquisition of metallurgical samples and geotechnical data. Importantly, the program will also include holes to test open edges of the deposit, including deepening a hole that previously ended in good grade mineralization; it will also follow up a new deep target to the north identified in 2016.
Elsewhere in BC, the Company carried out initial drill tests of two properties, Milligan West and UDS, and conducted target development work on several other properties with the proceeds of an $825,000 flow-through share financing completed mid-year. Results from both drill programs were reported recently and although economic grades over mineable widths have yet to be encountered, both these projects show promise of discovery and warrant further work. We are particularly encouraged by the identification of a substantial, previously unknown, intensely pyritic alteration system on the UDS property that with more work may well turn out to be associated with a copper-gold porphyry deposit.
The Company is in a much improved financial position compared to this time last year. Our working capital at December 31st , is approximately $1.1 million in Serengeti plus $6.3 million held in Kwanika Copper Corp., which will be used to fund the advancement of the pre-feasibility study on the Kwanika project. We are also of course continuously on the lookout for new opportunities that would complement our existing assets. The coming year should be an exciting one for the Company and we look forward to sharing that success with you. As always we welcome your calls and emails, or you can visit our website at www.serengetiresources.com to track our progress.
Thank you for your continuing interest and support.
David W. Moore
President & CEO
This document contains “forward-looking statements” within the meaning of applicable Canadian securities regulations. All statements other than statements of historical fact herein, including, without limitation, statements regarding exploration plans and other future plans and objectives, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and future events and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations as well as a comprehensive list of risk factors are disclosed in the Company’s documents filed from time to time via SEDAR with the Canadian regulatory agencies to whose policies we are bound. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made, and we do not undertake any obligation to update forward-looking statements should conditions or our estimates change, other than as required by law and readers are further advised not to place undue reliance on forward-looking statements. Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this communication.